Ms Nomsa Nkata purchased her home in Durbanville financed by two mortgage bonds from FirstRand Bank. After repeatedly falling into arrears, the Bank attempted enforcement, issuing section 129(1) notices under the National Credit Act 34 of 2005 (NCA), which were incorrectly addressed. Default judgment and a writ of execution against her home were granted by the Registrar in September 2010. Before a scheduled sale in execution, Ms Nkata and the Bank concluded a settlement in December 2010, cancelling the sale and allowing her to pay arrears. Ms Nkata subsequently paid all arrears by March 2011 and resumed regular payments. The Bank, however, had unilaterally debited legal enforcement costs to her bond account without demanding payment or having the costs taxed or agreed. Despite her payments, the Bank later proceeded with another sale in execution in April 2013, selling the property to a third party. Ms Nkata challenged the validity of the sale, contending that her credit agreement had been reinstated under section 129(3) of the NCA when she paid the arrears.
Leave to appeal was granted and the appeal succeeded. The Supreme Court of Appeal order was set aside. It was declared that the credit agreement was lawfully reinstated on 8 March 2011; the default judgment and warrant of execution thereafter had no legal force; the sale in execution of 24 April 2013 was set aside; and the property could not be transferred to the third respondent. FirstRand Bank was ordered to pay Ms Nkata’s costs in all courts.
This case is a leading authority on reinstatement under section 129(3) of the NCA. It strengthens consumer protection by limiting credit providers’ ability to defeat reinstatement through unilateral accounting practices and clarifies that reinstatement occurs automatically by law once statutory requirements are met. The judgment reinforces constitutional values of fairness and access to housing in credit enforcement against primary residences.